Tuesday, April 27, 2010

Earnings Heads-up: "Bachman and Stone - Contrasting Views on First Solar Q1 Earnings for Tomorrow" (FSLR)

UPDATE II: I forgot to add, FSLR earnings will be released after the close Wednesday. The stock is trading down a couple bucks at $129.95.
"Auriga Sees First Solar Entry Point Coming" (FSLR)"'

Original post:
You'll find some backround in the April 9 post "First Solar Earnings Seen Bottoming in 2Q" (FSLR)"'

Regarding the two analysts, we have this from March 19th's "SunPower Maintained at Outperform at Cowen - Cut EPS Forecasts (SPWRA)":
Cowen's Mr. Stone has not been on his game recently. Here's SPWRA compared to the NASDAQ and Claymore’s Global Solar Energy Index (TAN), over the last six months (from BigCharts):

Back on January 15 we posted "Cowen’s Stone Weighs in on Solar Sector - Thinks Stocks Are Oversold on Concerns About German FIT (FSLR; SPWRA; TAN; TSL)". The solar's have dramatically underperformed. He maintained an "Outperform" on FSLR as that stock dropped from $142.66 in mid-December to $98.71 on Feb. 25, 2010....
Whereas we treated Mr. Bachman a bit gentler in "Auriga Picks Up Solar Coverage on Eight Stocks; Assigns Buys to TSL, YGE and SOLF"':
Mark Bachman has been one of the better solar analysts.*
I didn't know that he had left Pacific Crest.
Or that he started spelling his name with a "C"....
Here's the latest, from SmallCapPulse:
Analyst Comments – Auriga’s Mark Bachman said this morning that he things the Street is still overestimating First Solar’s (Nasdaq:FSLR) 1H revenue while underestimated 2H results. He thinks “the Street will fix its mistake following the Q1 earnings call on Wednesday” but the news will put some short-term pressure on the stock. A contrasting view comes from Cowen’s Rob Stone, who expects Q1 results “in-line to slightly above the Street.”

Bachman’s Takeaways:

· Estimates “materially different from consensus” with Q2 revenue projection $78 million below the Street, and EPS $0.47 below the Street. Gross margin should approach 49%. Thinks First Solar is in for near-term pressure on the stock after the company reports tomorrow after the close.

· Maintains HOLD rating and $143 price target, 19x FY11 EPS of $7.52.

Stone’s Takeaways:

· Revised model for more H2-weighted 2010 and weaker Euro in 2011-13. Sees EPS in-line to slightly above Street estimate of $1.65 on $546 million in revenue, but the Street looks a bit high for Q2....MORE